U.S. farmers could get an extra Christmas present before the end of this year. But whether the gift falls into the category of that unwanted Christmas tie or the fancy, new pick-up you’ve had your eye on remains to be seen.
USDA’s Farm Service Agency is close to releasing its new regulations for payment limitations, and, while those words have often created concern, particularly in rice and cotton country, a top USDA official says the new rules won’t be as bad as farmers might fear.
“I expect – and I don’t want to create any more anxiety out there than already exists – but I expect we will be announcing our proposals for rules governing payment limits and actively engaged as well as a memorandum of agreement with the IRS,” said James W. Miller, undersecretary of agriculture for farm and foreign agricultural services.
Miller, the keynote speaker at the USA Rice Federation’s Rice Outlook Conference in New Orleans on Thursday (Dec. 10), said he anticipates the regulations for the new payment limit rules and the implementation of the new crop disaster program known as SURE, could be published by the end of the year.
“Before you get all excited about this, let me make a couple of general comments and, while I cannot talk about the specifics, let me just say in general that I am very much aware of the concern in the rice industry and several other commodity sectors,” he said.
“I have over a number of years – when I worked both in the private sector as well as my employment in the Senate and now in my role at USDA –worked closely with some of the strongest advocates that you all have in the Congress of the United States.
Miller, a former aid to North Dakota Sen. Kent Conrad and former staffer of the National Association of Wheat Growers and the National Farmers Union, said he met the day before with Arkansas Sen. Blanche Lincoln, the chairman of the Senate Agriculture Committee.
“You have no stronger representative in Congress than Sen. Lincoln,” a seventh-generation member of an Arkansas farm family. “So I’m very much aware of the impact that this issue can have on you.”
Farmers, he believes, will not find the new regulations “all that draconian. We are, in fact, going to address what we believe are some contradictions in the rules that the Bush administration put out (in December of 2008).
“Let me also caution you that, while we are going to establish the rules for 2010 and to the extent that we propose changes there will still be an opportunity to comment on those, but those will be the rules that are going into effect.”
The new regulations are the result of changes Congress made in payment eligibility rules in the 2008 farm bill. Besides eliminating the three-entity rule and stepping up qualifications for being actively engaged in a farming operation, Congress set new gross income limits for program payment recipients.
USDA is working on a memorandum of agreement with the IRS to meet the congressional mandate that payments not be made to individuals who live on New York’s Park Avenue or other places where incomes are over certain levels.
“This is the way for USDA to meet the intent of Congress, to satisfy the concerns that have been raised by other government watchdog organizations such as the USDA Office of Inspector General and the GAO,” he said. “Our goal is to ensure that no one in the Farm Service Agency or USDA has access to any individual’s private financial records.”
Under the agreement, the IRS will run data through their own programs and indicate whether a producer is in compliance with the new income levels or the producer is not in compliance with various payment limitation regulations inside the farm programs and the conservation programs.
“If you’re in compliance, you’re good as gold. If the IRS says we ought to check on that, we will provide a number of different opportunities for you to demonstrate that you are, in fact, in compliance. The final opportunity would be a national appeal where you could if you wish to bring in your own tax information to demonstrate your eligibility.”
The payment limit issue is “not going to go away all that easy, and we will continue to have discussions and debate about that issue well into the future,” said Miller. “But we are making headway, and, again, before you get terribly concerned, I hope you will wait until you see what you are publishing, hopefully later this month.